CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT.

No. 89-258. Argued January 16, 1990 -- Decided
April 30, 1990

Shortly after respondent American Stores Co., the fourth
largest supermarket chain in California, acquired all of the
outstanding stock of the largest chain, the State filed suit in
the District Court alleging, inter alia, that the merger
constituted an anticompetitive acquisition violative of § 7 of
the Clayton Act and would harm consumers throughout the State.
The court granted the State a preliminary injunction requiring
American to operate the acquired stores separately pending
resolution of the suit. Although agreeing that the State had
proved a likelihood of success on the merits and the probability
of irreparable harm, the Court of Appeals set aside the
injunction on the ground that the relief granted exceeded the
District Court's authority under § 16 of the Act to order
"injunctive relief." The court relied on an earlier
decision in which it had concluded on the basis of its reading of
excerpts from subcommittee hearings that § 16's draftsmen did
not intend to authorize the remedies of "dissolution"
or "divestiture" in private litigants' actions. Thus,
held the court, the "indirect divestiture" effected by
the preliminary injunction was impermissible.

Held:

Divestiture is a form of "injunctive relief"
authorized by § 16. Pp. 278-296.

(a) The plain text of § 16 -- which entitles "[a]ny
person . . . to . . . have injunctive relief . . . against
threatened loss or damage . . . when and under the same
conditions and principles as injunctive relief against threatened
conduct that will cause loss or damage is granted by courts of
equity" -- authorizes divestiture decrees to remedy § 7
violations. On its face, the simple grant of authority to
"have injunctive relief" would seem to encompass that
remedy just as plainly as the comparable language in § 15 of the
Act, which authorizes the district courts to "prevent and
restrain violations" in antitrust actions brought by the
United States, and under which divestiture is the preferred
remedy for illegal mergers. Moreover, § 16 states no
restrictions or exceptions to the forms of injunctive relief a
private plaintiff may seek or a court may order, but, rather,
evidences Congress' intent that traditional equitable principles
govern the grant of such relief. The section's "threatened
loss or damage" phrase does not negate the court's power to
order divestiture. Assuming, as did the lower courts, that the
merger in question violated the antitrust laws, and that the
conduct of the merged enterprise threatens economic harm to
consumers, such relief would prohibit that conduct from causing
that harm. Nor does the section's "threatened conduct that
will cause loss or damage" phrase limit the court's power to
the granting of relief against anticompetitive
"conduct," as opposed to "structural relief,"
or to the issuance of prohibitory, rather than mandatory,
injunctions. That phrase is simply a part of the general
reference to the standards that should be applied in fashioning
injunctive relief. Section 16, construed to authorize a private
divestitutre remedy, fits well in a statutory scheme that favors
private enforcement, subjects mergers to searching scrutiny, and
regards divestiture as the remedy best suited to redress the ills
of an anticompetitive merger. Pp. 278-285.

(b) The legislative history does not require that 16 be
construed narrowly. American's reliance on the subcommittee
hearing excerpts cited by the Court of Appeals and on Graves
v. Cambria Steel Co., 298 F. 761 -- each of which contains
statements indicating that private suits for dissolution do not
lie under § 16 - - is misplaced. At the time of the Act's
framing, dissolution was a vague and ill-defined concept that
encompassed the drastic remedy of corporate termination as well
as divestiture. Thus, the fact that Congress may have excluded
the more severe sanction does not imply that the equitable
formulation of § 16 cannot permit divestiture. Since the
inferences that American draws simply are not confirmed by
anything else in the legislative history or contemporaneous
judicial interpretation, § 16 must be taken at its word when it
endorses the "conditions and principles" governing
injunctive relief in equity courts. There being nothing in the
section that restricts courts' equitable jurisdiction, the
provision should be construed generously and flexibly to enable a
chancellor to impose the most effective, usual, and
straightforward remedy to rescind an unlawful stock purchase. Pp.
285-295.

(c) Simply because a district court has the power to order
divestiture in appropriate § 16 cases does not mean that it
should do so in every situation in which the Government would be
entitled to such relief under § 15. A private litigant must
establish standing by proving "threatened loss or
damage" to his own interests, and his suit may be barred by
equitable defenses such as laches or "unclean hands."
Pp. 295-296.